November, 2023

Issue #1

Edito
Shining a light on the hidden world of policy analysis!
Welcome to our new newsletter that will decode the policies adopted byfinancial players to restrict how they support the most polluting sectors of theeconomy, starting with the energy sector.
In the 2023 World Energy Outlook, the International Energy Agency (IEA)
identifies three complementary approaches to keep the door to 1.5°C open: areduction in fossil fuel production, the massive deployment of renewables and a
rapid increase in energy efficiency measures. While the adoption of energy
policies is essential to shift the trillions, we find that often the devil is in thedetail. Join us as we dive into the analysis of these policies to enable you tounderstand to what extent financial institutions contribute, or not, to the fightagainst climate change. Starting now.
This year's harvest is looking meager. While up to 131 and 91 of the 300
world’s biggest financial institutions have respectively adopted a coal or oil andgas policy so far, there has been a slowdown in the adoption of new and evenmore robust policies. This autumn sadly confirms the trend, with only KBC
updating its coal policy and Société Générale, following banks such as HSBCand ING, finally announcing it will stop financing new oil and gas fields anddirectly associated midstream infrastructure (pipelines and LNG export
terminals). While we have reason to get excited by this commitment comingfrom the 8th biggest financier of the top 30 LNG import and export companies
since 2016 this could not be enough to rule out support to all new LNG
terminals and you can expect to hear from us about that soon.
And if you thought financial institutions might be keener to commit to financing
sustainable power supplies, you will be disappointed. The new Sustainable
Power Policy Tracker, launched in October by 13 NGOs, including Reclaim
Finance, reveals that only 8 banks have a target for financing sustainable
power supplies and that none have excluded “false solutions” from theirdefinition of “sustainable”. Find out more below.

Lucie Pinson, Director at Reclaim FinanceNew policies & updates

13191

8coal
policies

oil & gas
policies

sustainable
power targets+1 New policy:+1 New policy:

Nykredit

Nykredit+1 Update:

KBC+1 Update:SociétéGénérale

Focus on sustainable power
According to the IEA in its “Net Zero Emission by 2050” scenario, annual
investments in “clean” energy must drastically increase to reach USD 4.2
trillion by 2030, most of it for “low-emissions” power, energy efficiency andend-uses transformation. But beyond getting the numbers right, banks shouldlook at how power is generated when they define their targets. To be clear,
there is no such thing as “clean” power, all energy sources have an impact. Arapid and just energy transition requires a more selective definition ofsustainable power.

Are renewable or decarbonized energies always sustainable?
Technologies such as wind and solar, that are mature and rapid to deploy with
low negative impacts, should be prioritized. Other sources, such ashydropower, can have a low impact on climate, ecosystems and human rights ifthey are guided by adequate environmental and social principles.

What is truly sustainable?
Technologies such as wind and solar, that are mature and rapid to deploy withlow negative impacts, should be prioritized. Other sources, such ashydropower, can have a low impact on climate, ecosystems and human rights ifthey are guided by adequate environmental and social principles.

Are banks up to the challenge?
Because the subject is so important and so consequential, what banks include
in their transition financing targets is one of the four criteria of the Sustainable
Power Policy Tracker. To date, none of the 60 banks assessed has correctly
defined its sustainable power scope. It’s a two-sided battle: convincing thebanks to adopt or raise their targets for financing sustainable power, without
forgetting the power grid, and publishing their definition of sustainable power,
limited to genuine sustainable solutions.

Find out more

Latest news
Société Générale announces
leading climate policy ongas
After several years at the back of the pack,
Société Générale has announced a leadingclimate policy on oil & gas. Read more

GOGEL

2023:

more

hydrocarbons, less chancesof 1.5°C

German NGO Urgewald, along with 50 otherNGOs including Reclaim Finance, publisheda third version of the GOGEL, the firstcomprehensive database on the oil and gas
industry. Read more

Resources

DiscoverDiscoverDiscoverTake action!
Find out more about our recommendations for banks to adopt a robust power
policy.

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